North of Robertsbridge
Well-known member
Both DB and annuity pensions can provide beyond death, although not as much as DC. Annuities allow trade-offs between annual income and guarantees for beneficiaries after death
there was an article on this on Martin Lewis earlier this evening. As I understood it, it will be liable for double tax.That’s going to change from 2027. As pensions are now within the framework of IHT, the pension will be income tax free to the beneficiary ( even after age 75) so there is no element of double taxation.
Ah, good point, bloody good for those of us that are mate. In 1 hour and 45 minutes I’m heading to Gatwick and around 11 a.m. I’ll be in Marrakech. Sorry, I’m not helping am IThis thread is depressing for a number of us not nearing retirement.
Just heard that in fact what I said about income tax on inherited pensions is not right. The income tax rules will likely remain. So a form of double taxation.That’s going to change from 2027. As pensions are now within the framework of IHT, the pension will be income tax free to the beneficiary ( even after age 75) so there is no element of double taxation.
Seems to have been some confusion over this point but it appears that you are right and there will be IHT and income tax.there was an article on this on Martin Lewis earlier this evening. As I understood it, it will be liable for double tax.
Looks like it will be taxed at 40% IHT and then recipients tax band so if they’re on 40% tax that would equate to the pension being taxed at a whopping 64%!!!Seems to have been some confusion over this point but it appears that you are right and there will be IHT and income tax.
I’m 32 days into a tour of AustraliaAh, good point, bloody good for those of us that are mate. In 1 hour and 45 minutes I’m heading to Gatwick and around 11 a.m. I’ll be in Marrakech. Sorry, I’m not helping am I
If I'd retired in Burgess Hill I would also be looking to get as far away as possible as often as possibleI’m 32 days into a tour of Australia
Fair pointIf I'd retired in Burgess Hill I would also be looking to get as far away as possible as often as possible
My understanding. No IHT to spouse. So she will get all your SIPP (or other defined contribution pot) free of IHT but any drawdown will be at her marginal rate but can still enjoy 25% free of tax. Only when she dies will the IHT kick in.Looks like it will be taxed at 40% IHT and then recipients tax band so if they’re on 40% tax that would equate to the pension being taxed at a whopping 64%!!!
Im not sure though when it’s payable. When I croak it does it get taxed before it’s left to Mrs A or does it still transfer to her tax free and then what ever is left is taxed at time of her death?
Partly right. The is no IHT between spouses. If death is before age 75 there is no income tax on withdrawals, after 75 any withdrawals are taxed at marginal rate of surviving spouse. The 25% tax free cash can only be taken by the original spouse so if it hadn’t been taken by age 75 (unlikely) it would be lost.My understanding. No IHT to spouse. So she will get all your SIPP (or other defined contribution pot) free of IHT but any drawdown will be at her marginal rate but can still enjoy 25% free of tax. Only when she dies will the IHT kick in.
Happy to be corrected ...
I would have thought that on the first death the value of the SIPP would be paid to the spouse, as cash, and is no longer treated as a pension. The spouse can then do whatever they want to with that cash, but whatever they do will form part of their estate for inheritance tax purposes when the spouse dies.My understanding. No IHT to spouse. So she will get all your SIPP (or other defined contribution pot) free of IHT but any drawdown will be at her marginal rate but can still enjoy 25% free of tax. Only when she dies will the IHT kick in.
Happy to be corrected ...
I spent 6 months travelling round India as a budget backpacker back in the early 1980s. It remains the most extraordinary country I’ve experienced and frankly, quite an ordeal at times. Certainly character-building on a large scale. But if you’re going as a relatively wealthy tourist and staying in nice hotels it’s probably a very different experience. It will be an amazing trip, I’m sure.Thank you, and noted Really excited it’s so much more than two weeks in Majorca, pushing us outside our comfort zone but creating some great memories and, I hope, a stepping stone for more adventures!
Retirement is f***ing fantastic, especially the first 10 years or so as most people have all three sides of the ‘golden triangle’ intact — money, time, and good health. For most of our lives we have just 2 out of the 3 available. Depends what age you retire but generally 65-75 can be like one long glorious holiday. I’m 67 so I hope I have at least another 8-10 years at least to enjoy it.Well of course you should talk about retirement, but instead of sharing amazing holiday plans, can't you just say it's crap, you're bored and you wish you were still working?
Good man. Am hoping to be there for some of the Ashes test series next year. Let me publicly thank @Change at Barnham for his expertise in giving me some pointers on options for doing an Ashes tour.I’m 32 days into a tour of Australia
Retirement is f***ing fantastic, especially the first 10 years or so as most people have all three sides of the ‘golden triangle’ intact — money, time, and good health. For most of our lives we have just 2 out of the 3 available. Depends what age you retire but generally 65-75 can be like one long glorious holiday. I’m 67 so I hope I have at least another 8-10 years at least to enjoy it.
What is this 'inheritance' that you speak of?After the budget, and the news of IHT (and tax) on Pensions (SIPPs) left for beneficiaries, how many of us retired are starting to re-think our estate and pensions plans? (assuming I last past 2027!).